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Mayor's housing office explains reallocations, unit reductions and cost pressures on 2015 affordable housing bond
Summary
The mayor's housing office told the committee it reallocated funds within the $310 million 2015 affordable housing bond after site due diligence found geotechnical and seismic risks at one parcel; officials also cited rising construction costs and federal tax changes that reduced per-unit equity.
Kate Hartley, director of the Mayor's Office of Housing and Community Development, briefed the committee on progress and recent reallocations under the city's $310 million 2015 affordable housing bond. Hartley said the bond's first issuance ($74 million) is about 93% expended and that the office moved funds previously earmarked for 250 Laguna Honda to senior housing at 1296 Shotwell and shifted other allocations (4840 Mission) to family housing at 88 Broadway.
Hartley told the committee the Laguna Honda site underwent site due diligence that revealed an unstable hillside above the parcel and a historic resource (a church) on the site; geotechnical and seismic-safety concerns and the resulting cost and liability led MOHCD to reallocate funds to developments that could move forward more quickly and provide near-term public benefit. She emphasized the decision was driven by cost-effectiveness and site risk, not neighborhood opposition, though she acknowledged there was local opposition.
Commissioners pressed for detail after a committee member noted a drop in projected units (from about 1,785 to 1,388). Hartley attributed the decrease to the reallocation of sites, rising per-unit construction costs and a loss of equity caused by federal tax reform (estimates around $50,000 less equity per unit in low-income tax credits). She said MOHCD will provide more granular line-item information on where those unit changes occurred.
Hartley also described a teacher-housing project at 40 Third and Irving on surplus school-district land, funded as middle-income housing with a component financed by low-income housing tax credits to serve paraeducators. She said a developer was selected and design work is underway. Committee members asked to schedule project site tours (Sunnydale/Potrero Parcel X was suggested) and requested the Turner & Townsend study Hartley referenced about construction costs.
The committee did not take formal action on the presentation; members requested additional documentation on unit counts, financial reconciliation and the referenced consultant study.
